On the Green Shift, I don’t think it’s a perfect plan but I think it’s a pretty good one, and it’s gone reasonably well so far for the Liberals. One of my concerns at first was why carbon tax revenues would be used for anti-poverty measures. Not that I’m against anti-poverty measures, I just thought that a carbon shift wasn’t the place to deal with it. However, given that low income people don’t have much income to shift, special initiatives to focus on that demographic help to blunt the impact of the green shift on them and counter the criticism it will hurt the poor.

There has been predictable criticism from the Conservatives that the Liberals are out to get the West, or specifically Alberta and Saskatchewan. While those provinces will indeed likely be more hit, that doesn’t mean the Liberals are out to get them; it just means they produce a lot of oil, with corresponding environmental impact. The fact is, any serious environmental plan is going to have an impact on Alberta, it can’t be helped. Which is perhaps why the Conservatives are only pretending to care about the environment, without taking any serious action. The oil boom isn't going to last forever but the environment needs too, I expect/hope many Westerners will know that.

Much has been made this week of a poll showing energy has surpassed the environment as the top concern of Canadians, although only by two per cent. I don’t think this is bad for the green shift though. Indeed, the two issues, along with the other top concern, the economy, are intrinsically linked. Energy prices are only going to keep going up, as people compete for an increasingly scarce resource. We need to put more effort into developing alternative energy sources, and if the carbon shift makes oil less attractive and makes it more attractive to look at alternatives, that’s a good thing.

Anyway, overall the jury is still out on the carbon shift and its political success. Many of the columnists and political elites are against it, polls show the people are much more receptive. Much will depend on the sales job the Liberals do over the next few months.

At the least, though, Dion and the Liberals have succeeded in taking the initiative, and setting the debate for a change rather than just reacting to the Conservatives. And by staking his political future on a risky policy proposal you can say what you will about him, but you can’t say he’s a wimp or not a leader anymore.

And for once it’s the Conservatives on the defensive, and that ain’t bad. With criticism like "it's crazy" and "it'll screw everyone" along with the complete lack of a viable alternative plan to present, the Conservatives are being increasingly exposed as unsuited to govern.

I think that's what we call unscientific polling data... not that the conservative right ever believed in science in the first place (global warming is a sure indication of that, since most of the sceptics wouldn't know a good scientific report if it hit them)

Whether or not there's an anti-poverty policy in the Green Shift is matter of mathematics, not whether or not anyone says or claims there to be.

I ran my family through the calculator on TheGreenShift site. we are a low-income family, and would receive somewhere between $2000-$2400.

Over at Progressive Economicsit is argued that once in full swing, our household costs would go up $2,000.

So we're set to "make" up to $400/year, if that cost calculation at Progressive Economics is right, and I have no idea if it is. NO one else seems to be putting clear numbers out. Remember that one has to account for both direct and indirect costs of a carbon tax.

This isn't an anti-poverty measure, from my view. Without the personal tax cuts and tax credits, the carbon tax would be a _poverty_ measure, and my family would be hitting a food bank.

I think that the jury is still out whether or not this represents any shift of money from the West to to the East. Although Alberta's per capita emissions of CO2 is terribly high, remember that the carbon tax is not taxing all carbon emissions, and that there are tax credits and a corporate tax cut in the pipe alongside the carbon tax. The carbon tax on diesel will impact the trucking industry, which is far more prominent in BC and in the East than in Alberta.

Jack Mintz in yesterday's national Post wasn't so clear on whether Alberta is so bad off.

"Whether the plan is "almost" regional neutral or especially hits some provinces is hard to tell since the tax is applied at the wholesale level and not on the production of energy. The incidence of the carbon tax will fall on households and energy-using industry so it generally affects all regions, especially those with resource and manufacturing sectors. Personal tax reductions will provide some relief to all Canadians although the anti-poverty measures tend to support poorer provinces. The benefits of corporate reductions go primarily to Ontario (43%), followed by Alberta (22%) and Quebec (20%)."

Alberta has a population of 3,500,000, Ontario's is 12,800,000. Using Mintz's numbers, per capita, Alberta is getting the lion's share of the corporate tax cut. At just slightly over one quarter of ON's pop, AB gets half the amount of corp tax cuts that ON gets. That's almost 2:1 in favour of AB.

BCer in TO has been in TO too long. If you'd take a little peak at your homeland you'd get a preview of Dion's future. Campbell's tax was hailed across the board in February, polls showed broad-based support, and the greenest province in Canada cheered its saviour! Today, more than 60% want the tax "axed", Carole Taylor and the NDP (The BC NDP for Gawd's sake!) are gaining and Campbell may actually have to pull the tax in order to survive the next election.

A carbon tax isn't as nice a reality as it is fantasy policy. Good luck with that.

When you go out to make a video to promote your product "randomness" isn't part of the equation. Ath the very least you pick people on the street you think might hold a favorable view, and if it isn't live you can edit out the bad ones on the cutting room floor.

I agree with you that it wasn't a scientific poll.... it was a disaster.... if that was the best of the people they could find.

Jeff I noticed you mentioned Alberta and Saskatchewan in your post. I might point out that all 3 northern governments came out against it this weekend?

But McGuinty (who was against a carbon tax 6 months ago) "likes the sound of it... but wants more (some) details.

Don't we all. The plan is good on broad strokes. But Dion can't seen to provide details.

Maybe you could ask him for me Jeff (since he didn't answer the question posed on John Gormley Live in Saskatchewan). With the exdous in jobs from the oil patch, farming, construction trades, etc etc, in Saskatchewan (which he conceded would happen on the show) ... where are they going to get jobs?

Dion said the university would pick up a bunch of them as research job into renewable energies and we would lead the country in that regard (we already do).... but where would the uniersity funding come if that were the case?

If you want the saskatchewan reaction to Dion's plan... listen to the Ondemand for John gormley live (June 27th they did most of the show on it.... Dion was on at the start, later Boyd (Sask energy minister)

http://www.newstalk650.com/shows/john-gormley/ondemand

People who think the video was not a poll... This isn't either.... And in comparison that video makes Dion look good.

You know, you'd be amazed at how many people don't know any of the politicians, including Harper.

During the last election some reporters did on the street type interviews and it's embarrassing to see how many people don't know anything about our politics, etc. More distrubing, the number of our youth who weren't going to bother to vote...going to the pub instead. They conducted interviews a various universities/colleges.

This means that Harper's "pretending to care" attitude (and to be fair, the previous Martin gov't as well) is working (or at least not making things worse). Market forces are driving down demand for ghg emitting fuel (and helping us reach Kyoto targets). And market forces (not more gov't intervention) are one of the cornerstones of conservative philosophy.

It's also positive news for the environment, for a change.

But don't expect Dion to advertise this fact. It would be embarrassing to acknowledge that emissions have dropped during Stephen "only pretending to care" Harper's gov't (and yes, also during Martin's gov't).

And can you imagine Suzuki acknowledging that emissions dropped under Harper's gov't? Gasp!!

Better to play politics instead: Big bad non-caring Harper makes emissions go up. Vote green-friendly Dion and emissions will go down. Drill that line into everyone's heads until they ignore the facts.

The decline described (7 mt avg decline per year), if it continued, would allow us to reach our Kyoto target of 521 Mt by 2012 in 2031. That's hardly adequate.

Of course, it won't continue.

"The overall decrease in emissions since 2003 is due primarily to a change in the mix of sources used for electricity production (reduced coal and increased hydro and nuclear generation), lower emissions from fossil fuel production (as a result of fuel switching and a smaller volume of oil refined) and reduced demand for heating fuels because of warmer winters in 2004, 2005 and 2006."

Oil refineries started burning natural gas instead of coke, which reduces CO2, but increased production -- and it will increase -- will come to nullify that CO2 reduction.

We had some warmer winters. There's nothing like depending on the weather for emissions reduction policy. I guess global warming may make our winters on average warmer, but if they also make our summers on average hotter, those air conditioners pulling power aren't going to help emissions any.

There is no fundamental economic shift described in this data which will cause our emissions to drop below 1990 levels which is where they need to drop to _start_ to do anything about global warming.

And, unfortunately, our GHG emissions per unit of energy produced has gone almost unchanged since 1990. We need to be far more efficient.

There are increases in various industries during this time of emissions reduction as well:

I doubt Harper was particularly recognizable as opposition leader either. And I'd point-out, given the barrage of negative advertising the Cons have unleashed against Dion to negatively define him, if he's not recognized that's a positive, we can still then positively define him.

The decision by British Columbia to impose a carbon tax in July complements the federal government's plan to combat climate change through regulations, despite concerns to the contrary, Prime Minister Stephen Harper said Tuesday.

"The B.C. plan, which is tax-based, targets at this point mainly consumer emissions and emissions down the production stream," Harper told a Business Council of B.C. luncheon at the Westin Bayshore.

barcs,Jeff I noticed you mentioned Alberta and Saskatchewan in your post. I might point out that all 3 northern governments came out against it this weekend?

I lumped them in with the "many of the columnists and political elites" in opposition line. I'm not familiar enough with the concerns of the Northern Premiers to comment with much knowledge. I recall reading in the plan some special considerations for remote, and possible for Northern, communities. If they don't go far enough that should perhaps be revisited, as the choices are limited up there. However, no where is the impact of climate change more pronounced than the North, so I'd think the people, if not the politicians, would be sensitive to the issue.

But McGuinty (who was against a carbon tax 6 months ago) "likes the sound of it... but wants more (some) details.

Actually, McGuinty wasn't against a carbon tax six months ago. That was tourqued newspaper headline writing. He simply said he felt that, at the provincial level, cap and trade was best for Ontario. And, as Mark regularly points out, cap and trade is part of the Liberal strategy too.

In terms of the provincial leaderboard, doesn't Quebec has some sort of carbon tax? That could, potentially, but BC, Quebec and Ontario in the pro-column, if you put much stock in such things. Three pretty big provinces.

Either way though, the job of provincial leaders is to look out for the interests of their provinces. The job of national leaders is to look after the interests of the nation. The two won't always coincide.

"Either way though, the job of provincial leaders is to look out for the interests of their provinces."

And which is Harper doing, eh? ;)

It’s interesting what isn’t being said: carbon trading, which is what Harper is pushing, will also put a price on carbon emissions (an unfixed price determined by commodity trading) which will benefit lower emission regions at the expense of higher emission regions -- that is, transfering wealth from AB/SK to everyone else. And yet, for _some reason_ that isn’t upsetting anyone out West.

When the plan first came out he shouted quietly about not supporting Dion in addition to not supporting Harper.

Mr. Williams lost all support I might have had for him (and his province) several years ago when he took down the Canadian flag off the legislature. As far as I am concerned I have no responsibility as a Canadian toward newfoundland until a different premier is elected.

Yes Jeff... there is a remote aera tax break that I will get. I think it is $150... considering the tax will cost my farm around $15-20,000 I think that $150 is fair. *rolls eyes*

(why isn't there a tax credit for doing things right like carbon sequestration? Even Koyoto recognizes newer farming methods like 0-till as a carbon sink)

Show me the numbers again on revenue neutral... if you start spending money on low income (rather than tax credits)... isn't that spending and not reduced tax?

Mark, you might want to go back through the differences of Cap and trade vs tax. (although both seem to result in "its ok to pollute if you are willing to pay for it.)

There is a carrot in a cap and trade system in that it will be people who reduce pollution that benefit. Unlike the tax grab/shift where the money gained is given out indiscriminately to anyone who pays taxes.

Companies that are able to lower emissions will soon under that system be able to sell their credits to companies that didn't and thus be able to sell at a lower sale price. That means more goods produced at lower emissions since consumers buy lower priced items more often.

While the tax has some of the same effect the income redistribution is different.... and the benefit to companies who lower emissions will be 2/3 again what they will receive under a tax system.

"as I am concerned I have no responsibility as a Canadian toward newfoundland until a different premier is elected."

I would separate a silly political statement made by some politicians from the rest of the province.

"considering the tax will cost my farm around $15-20,000 "

You farm would be corporate. Are there any benefits from corporate tax cuts that help you out? That's included in the tax shift.

I know that commodity trading is really making the costs of inputs to farming very expensive. What's the basis for your cost increase due to tax shifting?

I would be interested in knowing where you got this number, as I'm prepared to do research as to whether there are any other policies in the pipe. I would also like to know where your farm generally is, it's size, and general crops grown.

I'm very interested in preserving our farms. I used to live on one... that is to say, some great farmland was turned into a subdivision which I grew up in. Stupid, stupid, stupid...

Exempting any industry from any CO2-reduction initiative either places more onus on other industries (so they end up subsidizing the exempt industry) or contributes to emission-reduction policy failure, which is a real threat given the habit of politicians to make deals. This is a problem with both tax shifting and cap-and-trade.

"why isn't there a tax credit for doing things right like carbon sequestration? "

Well there is a tax advantage if it involves purchasing equipment. The depreciation rate is accelerated under the tax shift.

Existing practices you have adopted prior to the tax shift would gain you no tax benefit. I am seeing your point: If the carbon emissions from certain agricultural practices are not subject to the carbon tax, then there's no benefit for the carbon emission reductions you do do.

It is known that this tax shift does not address all domestic releases of CO2. I beleive it addresses about 75% of sources. There is still work to do.

The Cap-and-trade plans I've seen will also not address all emissions sources.

These things are all works in progress.

"Show me the numbers again on revenue neutral"

The money taxed is paid back out in tax cuts and credits. The math will vary from year to year, and eventually would lead to either a reduction in tax cuts or an increase in the carbon tax. You have to wait and see.

The basics of tax shifting is to discourage the pollution being taxed. If that revenue stream dries up, well, mission accomplished. All tax system needs to be revamped time to time.

"There is a carrot in a cap and trade system in that it will be people who reduce pollution that benefit. Unlike the tax grab/shift where the money gained is given out indiscriminately to anyone who pays taxes."

Carbon Tax shifts reward people for reducing their carbon footprint. The tax cuts and tax credits are only intended to help offset the direct and indirect costs of the carbon tax. People who do nothing to reduce their carbon footprint will gain nothing. And, actually, the cuts are designed such that higher income persons will be penalized despite receiving a tax cut. This is, ultimately, a consumption tax, though it is hopefully designed to be close enough to large emitters to give them impetuous to change, which will result in more efficient reduction of carbon emissions.

Corporations which reduce emissions will see their fiscal bottom line improve as profits would increase. If they pass along some or all of those savings, sales could also increase, assuming that competitors don't follow suit. If the profits are not passed along, the tax cuts and tax credits will still help out the end consumers.

Cap-and-trade has a severe weakness compared to tax shifting: the direct and indirect costs are passed on to consumers without giving consumers any means to cope with the increased costs.

Cap-and-trade is supported by the Liberal Party, and is a policy to be likewise implemented. See Green Shift, page 22; Liberal Carbon budget, 2007.

"Companies that are able to lower emissions will soon under that system be able to sell their credits to companies that didn't and thus be able to sell at a lower sale price. That means more goods produced at lower emissions since consumers buy lower priced items more often."

That applies to the Green Shift as well. Corporations which reduce their emissions will pay less tax and will potentially sell their goods at a lower rate.

Another problem with cap-and-trade is that the price of carbon is uncertain. As we have been seeing with commodity trading in general these days, prices can really get out of hand.

An advantage of cap-and-trade is that the caps, if properly set and enforced, will cause emissions to reduce at a predictable rate.

I'm not at all arguing that either system is better. I actually believe in a policy hybrid.

"I would separate a silly political statement made by some politicians from the rest of the province."

Funny you should say that.... Jeef here was arguing a couple week ago about how silly politicians (like Bernier) aren't separated from countries like Canada. Not to mention: Bush, Blair, Chaney... etc.

"You farm would be corporate."

What is the difference between a family farm deserving your help and a giant faceless evil corporation? Is the 1 employee that helps Me, Dad and my brother enough?

The farm is about 7500 acres. And we grow most of what you can name (Western Canada) depending on which year it is and what conditions look like.

Basis for cost increase: Diesel 5 cents/L (BC's tax is going to be 7) That's $3000. Add to that increased capital costs for equipment (energy is used to make it, maintenence costs like oil, parts, grease etc. Nitrogen is $900/tonne today, just $20/tonne would be $8000.

"Well there is a tax advantage if it involves purchasing equipment. The depreciation rate is accelerated under the tax shift."

Wanna point out where? as far as I know class 10C is still 30%/year and most others are 10%/year.... maybe since they cost more I can write off more.

How does writing it off faster help anyway. Sure less tax today. but that offsets with later when you are writing off less. I spose I could buy more equipment at the inflated price to write off then too.

"Carbon Tax shifts reward people for reducing their carbon footprint."

Bull

Carbon tax doesn't penalize you as much for putting less carbon out. (and pollution is something different that carbon).

The reward in Dion's plan has nothing to do with carbon emmisions it is all income based.

"Corporations which reduce emissions will see their fiscal bottom line improve as profits would increase."

That doesn't happen in an increased tax situation. They will benifit a small amount from the reduced income tax (but the bulk of that still goes to individuals and low income). Energy efficiency (and especially retrofitting equipment is expensive which will take more out of the companies dwindling profits if they wish to continue to compete by reducing emissions.

Bottom line: short term their tax load goes up and inputs go up.... and sale price remains the same (as they try to compete with foreign companies.

I can answer my revenue neutral question for you. Dion did: "Its a federal program"... that means revenue neutral to the country. not to the region (isn't there a clause in the constitution about no region being unduly penalized?)

But there is another part to that revenue neutral question: If you start spending on low income... and it isn't tax credits since not much tax is paid... Isn't that properly called program spending??

In the end I can agree with you that a hybrid system is needed [if one accepts (global cooling, Global warming, climate change... whatever it is called now) as caused by the tiny fraction of carbon in the atmosphere that humans emit].

"Existing practices you have adopted prior to the tax shift would gain you no tax benefit."

In other words another political argument rather than an environmental one.... (much like placing the burden on the industrial countries to reduce carbon they emit and allowing others to shoot up the scale to produce more than we do. That is a political solution not an environmental one.)

You only get incentives to do the right thing when you have been doing the wrong thing. Those of you doing the more expensive right thing... SOL

The accelerated depreciation credit that I mentioned is not part of the current tax system. It is part of the Green shift proposal. The advantage of an accelerated capital cost depreciation is that it lets you deduct more money sooner, which reduces more taxes sooner. You can then recycle that money for another purpose sooner rather than later. Accelerated depreciation is always better. The fact that you have less to write off later is not a lack of benefit.

The Green Shift is a revenue neutral Federal program. It is not being presented as anything else. If one is going to keep insisting that a regional interpretation should be taken, I would point out two things

1. CO2 doesn't care about regions2. Toronto has a lot to complain about Ontario, if one is to think in terms of regional fairness. Repeat this concept 100s of times across Canada.

The entire point of cap-and-trade and direct carbon taxation is to include in costs costs which were previously external.

"You only get incentives to do the right thing when you have been doing the wrong thing."

I understand your point, and have made it before. If a regionalist system were used, that is, a system where each province kept the proceeds of a carbon tax, provinces with the highest emissions per capita would benefit the most. Provinces which had previously worked at reducing emissions, would get less. And if high emission areas failed to do anything, in order to make the needed reductions, the other regions would have to work even harder, in effect subsidizing the high emission regions.

This is why a national system is needed, not a regional one.

This issue exists on a global scale, for sure. A couple of things. First, the traditional industrialized world is the one which has caused global warming and should be taking the lead to reduce emissions (Analogy: If you do the crime, you have to do the time). It was very hard to convince emerging economies to reduce emissions when they were not yet the cause of the problem. The deal was -- AND IT WAS A DEAL -- for industrialized nations of that time to reduce emissions, and then the emerging economies would then join in. We are now about to start that second phase, and though Europe has doen rather well, North America is a disaster, and our hand to negotiate with the merging economies is a weak one.

The more we can do now, the better.

If the merging economies refuse to adapt while we are, then we will have to tariff them.

===I'm sensitive to your concerns regarding input costs increasing for farmers. I know that you don't have much, if any, ability to pass your costs along, given how the agri business works. Commodity trading has taken the outputs of farming by storm.

Yours may actually be a case for an exemption to the Green Shift proposal.

I wouldn't expect you to support a tax shift regime that costs you without allowing you to recoup at least some costs.

But you are still allowing for the splitting of environmental concerns with political ones. (which I guess is what koyoto is about after all)

Don't explain to me why the political branch of the argument is ok. (I know about politics and how being the popular government trumps other concerns)

I want you to tell me why it's ok that it trumps the environmental concerns..... If the planet is in as dire straights as claimed... why are the political considerations considered at all??? Maybe GHG isn't as important as some seem to claim??? Or wouldn't we have action from (everyone)... or wouldn't the science actually be bulletproof instead of swiss cheese??

http://upload.wikimedia.org/wikipedia/commons/f/fe/Kyoto36-2005.png

from wikipedia (If you can believe their numbers)

Canada (the only NA country to ratify it involved in the first phase) (Mr. Gore didn't when he was VP remember?) is 0/1

The rest of the 36 are about 18 for 35 going to meet those expectations (the treaty set... not the environment).

And you might notice in those 18 positives that they are small countries with small economies... or like Russia (and its former soviet states) an economy that collapsed just after the year we need to reduce from (but coincidently that year was when the economy was still running.

Take out those former soviet economies and you get about 10/28 or so.. barely 1/3 of the countries who ratified it will come close to making their targets.... less than the amount of countries that have increased their carbon totals since signing the treaty....

(so don't lie to me and Canadians about how how well all the other countries are doing... most of them aren't)

And at the conference somehow 8 countries promised to reduce emissions by only increasing them a bit (up to 25%) for the first treaty run....

I think it is time we declare Koyoto a resounding success and continue on with it. *rolls eyes* (Those other 140 countries (or so) that are going to be involved are obviously going to see what a good job the first 36 did and want to contribute in the same way.

The other end of the scale is doing nothing about emissions, and, indeed, not caring at all to the extent of actually increasing them. The net effect of that is climate change with many unknown consequences. What is known is not favourable.

So, in order to solve this serious problem without incurring other serious effects, we wrangle over how to proceed.

I think the biggest problem with Kyoto was that it simply took too long to be ratified (2005). A lot of countries couldn't be bothered to do much because for quite a while it didn't look like Kyoto was going to pass. That's largely the politics in play -- certainly, that's what was going on in Canada. The fact that America refused to sign was a huge problem. Clinton and Gore couldn't get it through the Republican-controlled congress. Bush denied global warming existed, actively suppressing government reports backing the science, until only recently.

The net effect is that Kyoto won't be met by most, but that new targets will be set. We are moving too slow, but at least we are moving.

China, by the way, has been installing wind turbines at an incredible rate. They are not completely unwilling to do what's needed. Besides, for China, there's an obvious tie-in between their terrible pollution problem and CO2 emissions. Reducing either will reduce the other.